CLA-2 RR:CR:GC 962804AM
Port Director
U.S. Customs Service
P.O. Box 55580
Portland, OR 97238-5580
Re: Protest 2904-99-100020; Yttria C
Dear Port Director:
This is our decision on Protest 2904-99-100020, filed by counsel on behalf of Grand Northern Products against your decision in the classification, under the Harmonized Tariff Schedule of the United States (HTSUS), of Yttria C, a large particle yttrium oxide product. In preparing this ruling, consideration was given to supplemental submissions filed by counsel dated March 30, 1999, October 5, 1999 and December 23, 1999.
FACTS:
Both entries pertaining to the subject protest were liquidated on November 27, 1999. The subject protest was filed March 1, 2000.
To understand the classification issues, it is necessary to set forth information concerning yttrium oxide. Because it is thermodynamically stable in the presence of most reactive engineering metals, Yttrium oxide (Y2O3) is an important and useful metal casting refractory. Metal casting refractories are the materials used to make the molds in which metal castings are made. However, the total effectiveness of yttrium oxide as a metal casting refractory is limited because of its affinity for moisture and carbon dioxide. Contamination of yttrium oxide with carbon dioxide results in the formation of chemically undesirable yttrium carbonates. Hydration of yttrium oxide forms yttrium hydroxides that have a high pH. Increases in pH cause most binder systems commonly used in conjunction with yttrium oxide to gel and/or experience very short useful lives. These hydration/carbonation problems are associated with the small particle size (2 microns or less) of commercially available yttrium oxide. As a result of this small particle size, there is a great amount of exposed surface area where hydration/carbonation can occur. One method for the elimination of problems associated with small particle yttrium oxide involves fusing the yttrium oxide and grinding it to a larger particle size more suitable for use as a metal casting refractory. The cost of fused yttrium oxide is high, almost twice that of the unfused product. Another, less costly method to create larger particle yttrium oxide, is by sintering (heating to below the melting point) the yttrium oxide.
Yttria C, the article subject to this protest, is a sintered larger particle yttrium oxide product used as a metal casting refractory. Lab Report 2-96-21505-001, dated April 12, 1996, analyzing previous entries of Yttria C, by Grand Northern Products, states, in pertinent part, "The importer indicates that a small amount of [sintering aid] is blended and fired with the yttrium oxide resulting in crystals of increased particle size. This denotes a single compound." Lab Report 2-1999-22129, dated November 15, 1999, states, in pertinent part, " . . .the sample, a fine off-white powder, is yttrium oxide containing a small amount of [sintering aid]. Information from the manufacturer indicates that this product contains approx. 2300 PPM (0.23%) [sintering aid]." Lab Report SF20010085, dated June 4, 2001, states, in pertinent part, the following:
This sample is a pale yellow powder named "Yttria C." Laboratory analysis and information from the maker indicates that it is composed of 99+ percent yttrium oxide and approximately .25 percent [of a dopant that functions as a sintering aid]. In our opinion, this material is not a mixture of chemical compounds. The [sintering aid] that was added functions as a sintering aid ( . .) that is used to densify the original yttrium oxide powder and to reduce its surface area. It apparently reacts with the yttrium oxide to either a solid solution (as claimed by the maker) or a mixed oxide of yttrium and [the sintering aid]. The latter is regarded as an unwanted impurity. This and other information ( . . .) clearly indicate that the [sintering aid] is used in the manufacturing process for Yttria C. Otherwise, it has no functional role in Yttria C. . . . [Thus, Yttria C is] a lower cost alternative to fused yttrium oxide.
Protestant entered the product under subheading 3824.90.39, HTSUS, the provision for ". . .chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; . . .: [O]ther: [M]ixtures of two or more inorganic compounds: [O]ther." The merchandise was liquidated under subheading 2846.90.80, HTSUS, the provision for "[C]ompounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals: [O]ther: [O]ther". Protestant requests an alternative classification of 2846.90.20, HTSUS, the provision for "[C]ompounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals: [O]ther: [M]ixtures of rare-earth oxides or of rare-earth chlorides."
ISSUES:
Was the protest timely filed?
What is the correct classification of Yttria C under the HTSUS?
LAW AND ANALYSIS:
PROTEST PROCEDURE
Under 19 U.S.C. 1514(c)(3)(A) and 19 CFR 174.12(e)(1), a protest shall be filed with the Customs Service within 90 days after the notice of liquidation. Both entries pertaining to the subject protest were liquidated on November 27, 1999, as indicated on both the Protest, CF 19, and the Customs Protest and Summons Information Report, CF 6445A. The CF 19 reflects that the protest was received by your office on March 1, 2000, i.e., that date is written in on the “date received” line. March 1, 2000 is 93 days after the date of liquidation, November 27, 1999 (three days in November, not including the date of liquidation, November 27, 1999, 31 days in December, 31 days in January, and 28 days in February).
Pursuant to 19 CFR 174(f): “The date on which a protest is received by the Customs officer with whom it is required to be filed shall be deemed the date on which it is filed.” Thus, the protest was filed on March 1, 2000.
For an example of the judicial treatment of a protest filed one day after the 90-day period for filing a protest, see Penrod Drilling Co. v. United States, 13 CIT 1005, 727 F. Supp. 1463, rehearing dismissed, 14 CIT 281, 740 F. Supp. 858 (1990), affirmed, 9 Fed. Cir. (T) 60, 925 F. 23d 406 (1991).
Inasmuch as the protest was not timely filed, it must be denied. However, in the event there are other protests which were timely filed, we have also addressed the classification issue.
CLASSIFICATION
Merchandise imported into the United States is classified under the HTSUS. Tariff classification is governed by the principles set forth in the General Rules of Interpretation (GRIs) and, in the absence of special language or context, which requires otherwise, by the Additional U.S. Rules of Interpretation. The GRIs and the Additional U.S. Rules of Interpretation are part of the HTSUS and are to be considered statutory provisions of law for all purposes.
GRI 1 requires that classification be determined first according to the terms of the headings of the tariff schedule and any relative section or chapter notes and, unless otherwise required, according to the remaining GRIs taken in their appropriate order. GRI 6 requires that the classification of goods in the subheadings of headings shall be determined according to the terms of those subheadings, any related subheading notes and, mutatis mutandis, to the GRIs.
In understanding the language of the HTSUS, the Explanatory Notes (ENs) of the Harmonized Commodity Description and Coding System may be utilized. The ENs, although not dispositive or legally binding, provide a commentary on the scope of each heading, and are generally indicative of the proper interpretation of the HTSUS. See, T.D. 89-80, 54 Fed. Reg. 35127 (August 23, 1989).
The HTSUS provisions under consideration are the following:
2846 Compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals:
2846.90 Other: [than Cerium compounds]
2846.90.20 Mixtures of rare-earth oxides or of rare-earth chlorides
Other: [than Mixtures of rare-earth oxides or of rare-earth chlorides]
2846.90.80 Other [thanYttrium bearing materials and compounds containing by weight more than 19 percent but less than 85 percent yttrium oxide equivalent]
* * * * *
3824 Prepared binders for foundry molds or cores; chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products), not elsewhere specified or included; residual products of the chemical or allied industries, not elsewhere specified or included:
Section note 1(b) to Section VI, HTSUS, provides as follows: "Subject to paragraph (a) above, goods answering to a description in heading 2843 or 2846 are to be classified in those headings and in no other heading of this section." Chapter Note 1(a) to chapter 28 states, in pertinent part, "[E]xcept where the context otherwise requires, the headings of this chapter apply only to: (a) [S]eparate chemical elements and separate chemically defined compounds, whether or not containing impurities, . . ."
The EN's to Chapter Note 1 to chapter 28 state, in pertinent part, the following:
(A) Chemically defined elements and compounds.
(Chapter Note 1)
Separate chemical elements and separate chemically defined compounds containing impurities, or dissolved in water, remain classified in Chapter 28.
The term “impurities” applies exclusively to substances whose presence in the single chemical compound results solely and directly from the manufacturing process (including purification). The substances may result from any of the factors involved in the process and are principally the following:
(a) Unconverted starting materials.
(b) Impurities present in the starting materials.
(c) Reagents used in the manufacturing process (including purification).
(d) By-products.
It should be noted, however, that such substances are not in all cases regarded as “impurities” permitted under Note 1 (a). When such substances are deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use, they are not regarded as permissible impurities.
* * * * * * * * * *
(C) Products which remain classified in Chapter 28, even when they are not separate chemical elements nor separate chemically defined compounds.
There are certain exceptions to the rule that this Chapter is limited to separate chemical elements and separate chemically defined compounds. These exceptions include the following products: . . .
Heading 28.46-Compounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium or of mixtures of these metals.
* * * * * * * * * *
EN 28.46 states, in pertinent part, the following:
This heading covers the inorganic or organic compounds of yttrium, of scandium or of the rare-earth metals of heading 28.05 (lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium). The heading also covers compounds derived directly by chemical treatment from mixtures of the elements. This means that the heading will include mixtures of oxides or hydroxides of these elements or mixtures of salts having the same anion (e.g., rare-earth metal chlorides), but not mixtures of salts having different anions, whether or not the cation is the same. The heading will not therefore, for example, cover a mixture of europium and samarium nitrates with the oxalates nor a mixture of cerium chloride and cerium sulphate since these examples are not compounds derived directly from mixtures of elements, but are mixtures of compounds which could be conceived as having been made intentionally for special purposes and which, accordingly, fall in heading 38.24.
* * * * *
The compounds of this heading include: . . .
(2) Other rare-earth metal compounds. Yttrium oxide (yttria), terbium oxide (terbia), mixtures of ytterbium oxides (ytterbia) and of oxides of other rare-earth metals of commerce are reasonably pure. The heading includes mixtures of salts derived directly from such mixtures of oxides.
In accordance with the section note quoted above, if the merchandise is classifiable in heading 2846, HTSUS, it can not be classified in heading 3824, HTSUS, because heading 3824, HTSUS, also falls in section VI, HTSUS. Furthermore, in accordance with Chapter note 28(C), even if the compound is not "a separately defined chemical compound," there is a preference elicited by the ENs for it to remain in heading 2846, HTSUS.
In fact, the terms of heading 2846, HTSUS, describe the instant merchandise. The merchandise consists of 99+% yttrium oxide. The two other substances allegedly found in the product are impurities in that they "result[s] solely and directly from the manufacturing process." While the sintering aid is not technically any of the enumerated exemplars of an impurity (unconverted starting material, impurity in the starting material, reagent or byproduct), it need not be so listed to be considered an impurity. The important point is that it is added to aid in the manufacture of the yttrium oxide product, Yttria C, and has no use as such in the final use of the merchandise, much like a reagent. (See submission dated March 30, 1999, p.4, ". . .Yttria C is a substantially transformed product, utilizing [the sintering aid] to create a new type of Yttrium Oxide.") Hence, the sintering aid functions in the creation and manufacture of larger particle yttrium oxide but is not left in the product for any specific purpose. Rather, it is an impurity resulting from a particular, less expensive, manufacturing process of larger particle yttrium oxide. (See Lab Report SF20010085).
Therefore, protestant's argument that the sintering aid is not a permissible impurity because it is "deliberately left in the product with a view to rendering it particularly suitable for specific use rather than for general use" is spurious. (See submission dated March 30, 1999, pp. 21-22.) The sintering aid facilitates a change in particle size of the yttrium oxide. The change in particle size and surface area is the result of the agglomeration process, the manufacturing process through which yttrium oxide becomes the patented product, Yttria C, a less expensive, larger particle yttrium oxide product. However, as present in Yttria C, the sintering aid does not aid in the metal casting process. Therefore, although "deliberately introduced" (Id. at 21) to the yttrium oxide to aid in the sintering process used to manufacture larger particle yttrium oxide, a product better suited to metal casting than small particle yttrium oxide, the sintering aid is not "deliberately left in the product."
Protestant claims that language in the ENs regarding the permissible addition of stabilizers "provided that the quantity added in no case exceeds that necessary to achieve the desired result and that the addition does not alter the character of the basic product and render it particularly suitable for specific use rather than for general use," supports the argument that substances added to render a compound suitable for a specific use can not be regarded as impurities.
Protestant is incorrect. Anti-caking agents, anti-dusting agents and coloring substances are all added to substances after they are fully manufactured. The sintering aid in the instant case is added in order to manufacture the final larger particle yttrium oxide product and is not useful in the functioning of the product as a metal casting refractory once it has performed its function in aiding the sintering operation. Hence, the sintering aid is not a stabilizer and is not analogous to a stabilizer. It has nothing to do with the noted examples of permissible and impermissible additions to Chapter 28 substances. Rather, the sintering aid meets the definition of an impurity in that it "results solely and directly from the manufacturing process."
Protestant also states that the language of EN 28.46 prohibits classification of the instant product in that heading (Id. at 18-19.) Simply stated, the EN describes some of the mixtures that are included in the heading. A mixture of the compounds cerium chloride and cerium sulphate are not included because they consist of "mixtures of salts having different anions" even though the cation is the same. Such mixtures of salts are conceivably made intentionally for special purposes. Conversely, the instant product is 99+% yttrium oxide mixed with a sintering aid whose function in the product has expired well before importation of the subject merchandise. The minute amount of sintering aid left in the product meets the definition of an impurity rather than that of a substance added "intentionally for special purposes" vis-à-vis the use of Yttria C as a metal casting refractory. As the ENs go on to state, "[T]he compounds of this heading include: . . .Yttrium Oxide . . . reasonably pure." Yttria C is undisputedly reasonably pure yttrium oxide. As such, it falls within the meaning of the terms of the heading.
Protestant also erroneously claims that HQ 960556, dated February 13, 1998, supports classification in heading 3824, rather than in heading 2846. (submission October 5, 1999, p. 3-5.) In that case, the issue was whether heading 3206, HTSUS, the provision for ". . .inorganic products of a kind used as luminophores . . ." applied to a product which, as imported, did not luminesce and one that luminesced only crudely and must undergo several more manufacturing procedures to be considered as a luminophore. Heading 3824, HTSUS, was found to be the appropriate classification, the provision for "mixtures of two or more inorganic compounds." The ruling found that classification under heading 3206, HTSUS, occurred using GRI 2(a), and that classification under heading 3824, HTSUS, occurs using GRI 1, making it the correct classification. In the instant case, classification in heading 2846, HTSUS, occurs under GRI 1 and precludes classification under 3824, HTSUS, in accordance with the section note.
Furthermore, protestant misreads the Draft Harmonized Rules of Origin, Second Examination, Chapters 28 and 29, Technical Committee on Rules of Origin (Document 41-497 E) Brussels, 28, July 1997, as support for the position that a change in particle size should accompany a change in classification of the product. Id. at p.23-24. In fact, the subject of the cited document is the rules of origin present under the North American Free Trade Agreement (NAFTA), not the classification of goods. The document simply states that "the TCRO also discussed various processes or combinations thereof which might confer origin in the absence of a tariff shift." (emphasis added)(p. 41.497E.) The language suggesting that substantial transformation has occurred if the particle size of a substance is altered is an example of the technical committee's recommendations regarding rules of origin without an accompanying change in classification. Hence, the submitted document actually disproves protestant's argument.
Lastly, we note that protestant's argument would result in two essentially identical substances, larger particle yttrium oxide as a result of a fusion process, and larger particle yttrium oxide as a result of a sintering process, being classified in two completely different headings of the tariff. This was not the intention of the drafters of the tariff and would result in an administratively untenable situation.
At GRI 6, neither the sintering aid or the yttrium oxide is a rare earth oxide. (See HQ 96102, dated August 24, 1999). The merchandise can not therefore be described as a "mixture of rare earth oxides" in subheading 2846.90.20, HTSUS.
HOLDING:
The protest is DENIED. Yttria C is classified in subheading 2846.90.80, HTSUS, the provision for "[C]ompounds, inorganic or organic, of rare-earth metals, of yttrium or of scandium, or of mixtures of these metals: [O]ther: [O]ther: [O]ther."
In accordance with Section 3A(11)(b) of Customs Directive 099 3550 065, dated August 4, 1993, Subject: Revised Protest Directive, you are to mail this decision, together with the Customs Form 19, to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry or entries in accordance with the decision must be accomplished prior to mailing the decision.
Sixty days from the date of the decision, the Office of Regulations and Rulings will make the decision available to Customs personnel, and to the public on the Customs Home Page on the World Wide Web at www.customs.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
John A. Durant, Director
Commercial Rulings Division